IRS Offers Safe Harbor for Janitorial, Landscaping and IT Maintenance Services

Revenue Procedure 2015-39 provides a safe harbor for accrual method taxpayers to treat economic performance as occurring ratably on contracts that provide services on a regular basis. In other words, under the safe harbor, a taxpayer can ratably expense the cost of regular and routine services as the services are provided under the contract.

Contracts for regular janitorial or landscape maintenance services are typical examples of contractual services that may qualify for the safe harbor, the IRS pointed out. Another example provided is for IT support and maintenance for human resources software.

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